Got Gold?

History teaches us that all paper currencies fail as a medium of exchange. It also teaches us that Governments confiscate their citizens' gold bullion as the paper currency loses credibility. And, for those few citizens who keep their gold, they can't use it to buy anything.

A Short History of Gold as Currency in the United States

Article 1 of the US Constitution mandates that the U.S. Government only issue gold or silver currency. The requirement evolved from the fact that during the Revolutionary War, the Continental Congress issued paper dollars called Continentals. By 1781, Continentals were worthless. The American saying "Not worth a Continental" comes this historic fact.

In the Civil War, the South required its citizens to convert their gold into Confederate Dollars, which were worthless in 1865. The North issued Greenback Dollars and the folk song refrain "Not worth a greenback dollar" tell us how much they were worth.

During World War I, the Government enacted the Trading with the Enemy Act. This law gave the president the right to prohibit the hoarding of gold.

As a result of the Depression, the Emergency Banking Act of 1933 ended Americans' right to own gold. Presidential Executive Order 6102 requires gold owners to convert their gold to dollars. Presidential Executive Order 6111 prohibits the export of gold coin, gold bullion or gold certificates.

After the Depression, we had a series of unending National Emergencies. World War II and the Korean War were justified. The Soviet threat was vastly overblown. We were the victims of failing to understand history during the Vietnam War. During all of this time, Americans were denied the right to own gold.

In December 1974, Congress returned the right to own gold to Americans. From the United States vs. Campbell onward, no Court challenge ever forced the Government to recognize Article 1 of the U.S. Constitution as binding on the Government. The 1974 Law doesn't require the Government to comply with the gold or silver currency requirement of Article.

Our current National Emergency is about 20,000 armed and angry individuals who violently disagree with the U.S. Government's Middle East Policy. The Governments response has been to suspend the Bill of Rights and open concentration camps. Also, the Government has adopted economic policies in response to the "War on Terror" that are spending us into the worst Depression in recorded history.

As our economy falters in the next few years, Americans will lose their right to own gold coins and bullion. For those that resist converting their gold to dollars, they will find they will be the new "Enemy Combatants" with no rights and living in a concentration camp.

Currently, the American Government collects data on anyone buying gold bullion. It makes it all the easier to find you when they want to take your gold. For those planning on resisting, they avoid the reporting requirement by buying their gold bullion in Canada or elsewhere outside of the United States. However, most of these "Gold Resisters" aren't very good about keeping their purchases secret. There are scores of mistakes they are making. Let me cite one example. The American bullion buyer flies to Canada. He or she buys their bullion coins from a Canadian gold dealer and they pay with their credit card. They fly back to the States and the dealer delivers their coins to them in the States. It takes the U.S. Government two minutes to determine from the credit card record that the "Gold Resister" has purchased gold bullion and will be a problem when the Government wants their gold.

Let's assume that you wisely purchased your bullion coins. The Government never found you. It now takes a wheelbarrow of dollars to buy a loaf of bread. You are feeling superior to most Americans with wheelbarrows. You want to trade one of your gold coins for a diary cow. The cow produces milk that can be processed into cheese and butter. Your gold coin produces nothing of benefit to your family. Will the Dairy Farmer sell the cow for your gold coin? If he or she does so, they become "Enemy Combatants." The gold coin produces nothing the farmer can use to sustain his or her family. There is no reason for the farmer to take your gold coin. I submit the economic reality will be that gold has little more value than dollars in the world of tomorrow.